Abstract The governments of Cuba and Israel are relatively young. The two countries are of similar size, population, and possess similar natural resources. They each have port cities with easy access to the world. Their governments were founded on socialist principles. Despite the similarities, the economic performance of Israel has far outpaced Cuba’s. This paper will examine the reasons behind the disparate economic performance of countries, and then specifically examine the economies of Israel and Cuba.

Why Some Economies Grow Faster Than Others There are many reasons why some economies grow faster than others. Let’s begin with the things that aren’t in the control of individuals or governments. Geography plays an important role in economic growth. It is more difficult to ship and receive goods in landlocked countries. Extremely hot or extremely cold climates limit the amount of human exertion possible and require more inputs in the form of heating and air conditioning. Economies that have an abundance of water, valuable minerals, arable land, and oil also have a significant advantage over those that lack natural resources. Ceteris paribus, most economists would agree that the next most important element of economic growth is a market oriented economy. The things that are necessary to facilitate a smooth transition to a market economy follow. People must have the freedom to seek utility and produce goods and services. Individuals must also have the right to own property, and the opportunity to succeed or fail. Economic growth will be diminished if individuals do not have the right to own property and the opportunity to succeed. Individuals must also be educated to the extent that they can assess the utility of various goods and services and choose the ones that best satisfy their needs. Individuals must also be educated to the extent that they are able to compute “the utility generated from alternative forms of self employment for their own account” Rosefield. Actions that replace, inhibit, or restrict these activities in any way will result in market failure. Implementing a market economy without rules will result in excessive rent seeking, activities in restraint of trade, restricted alternatives, and excessive inequality. Government must ensure there are rules (laws) to make sure competition is healthy. This should include laws to prohibit: practices in restraint of trade, price fixing, false advertising, barriers to entry, and others. To insure some level of equity, governments should also put measures in place to capture and redistribute wealth. This should include progressive income and inheritance taxes and various social welfare programs. Using taxes to build infrastructure and education programs will accomplish income redistribution and position the economy for further growth. Determining the extent to which equity should be pursued is a balancing act. If governments pursue equity too fervently, individual investment and effort will be stymied. If equality is not pursued, the resulting inequality will result in class strife and market failure. The ability to raise money and finance new businesses is critical to economic growth. Investors will not invest in economies that lack a stable currency or where governments are likely to confiscate the capital that was purchased through investment. Governments can play an important role in helping businesses raise capital by establishing contract laws, maintaining a stable currency, and promoting foreign investment. To avoid inflation, fiscal policy should be established with the express intention of not over stimulating the economy. Governments may also create central banks to implement a monetary policy designed to maintain a stable...

YOU MAY ALSO FIND THESE DOCUMENTS HELPFUL

...Why are Some Countries Richer thanOthers?
Poverty is still the biggest problem the world faces from day to day. Every country suffers from it to some degree, however certain places are greater effected thanothers. This is because the level of economic growth differs from country to country. The greater amount of growth the less room there is for poverty. This is simple reason...

...1. Why are some organizations more successful thanothers? Give a concrete example to demonstrate your point.
In the business world as competitive as today, to outperform and maintain success is by no mean an easy job. While the secrets to success may vary among different organizations, and may have been modified and informed from different standpoint, the fundamentals remain essentially true. Most of the successful corporations share...

...Using economic theory explain whysome countries are richer thanothers.
Abstract
This paper tries to analyze whysome countries are richer thanothers. Economic theory is used to identify the different factors affecting countries to be richer or poorer.
Introduction
One of the fundamental questions regarding the world during all the time is why...

...﻿Whysome water samples can be harder thanothers
(1)Hard water is any water containing an appreciable quantity of dissolved minerals. (2) Some of the minerals come from chalk, limestone or marble, which the water may have flowed over or through. (4) Hard water contains calcium or magnesium ions. Limestone, marble or chalks are insoluble in pure water however they will dissolve slowly in acidic rain. If your water has...

...Why are some volcanoes more hazardous thanothers?
There are several reasons that influence volcanic hazards, these include the viscosity of the magma, proximity to population centres, materials that are ejected from the volcano, the magnitude of the eruption and the plate margin that the volcano rests upon.
The viscosity of the magma depends on 3 things, the temperature, dissolved gasses and the chemistry involved in the magma. These...

...“Why do some people get paid more thanothers?”
Pay in the private sector is a matter of demand and supply, sometimes influenced by market imperfections. In the public sector the picture is less clear cut, but the public sector must be considered if only because in so many countries it is such a major employer. (It would be a big mistake to assume that MRP doesn’t affect the public sector just because it doesn’t exist in most of the...

...must be able to choose their own leader."
Albert Einstein
“No man is good enough to govern another man without that other's consent.”
Abraham Lincoln
Why are some leaders more powerful thanothers?
Is there one “best style” of leadership or does it depend on who is following?
Do women followers prefer a different leadership style than men followers?
When I think of great leaders, a few names come to my mind:...

...centres
- Whilst some volcanoes are located in remote parts of the world, many are located in areas of dense population or close to major cities. Those volcanoes (particularly the explosive ones) close to population centres are much more hazardous than those located in remote regions.
People live close to volcanoes:
- There is little choice but to be geographically close to volcanoes on islands where space is limited.
- Volcanoes can be associated with fertile...